In this post we will explain how to take advantage of the Ansoff matrix to grow your businesswhat Ansoff matrix examples you can apply, and much more.
With this content we seek to help you identify growth opportunities for your business. Next, we will talk in depth about it and explain how to apply it.
What is the Ansoff matrix or product market matrix?
Before I talk to you about the Ansoff matrix and some of its examples, it is important that we clarify its definition. Also known as “Product market matrix” and “Growth matrix”.
Although it was devised in 1957 by Igor Ansoff, it is still very useful in. Through it, the possibilities of expansion are analyzed of a business.
The matrix can be applied to any enterprise, no matter what area of the market it operates in or what its size is. This based on two strategies that we are going to define next: products and markets.
1. Product
It consists of developing new products in the area of the market in which you have always focused. Though does not mean leaving your comfort zonecontinues to assume investment and growth uncertainty.
This is so because it is necessary to develop new products whose acceptance value you do not know. The advantage is that you already have familiarity with the market. The businesses that are in this situation are those that:
- they plan.
- They develop new versions of products or services.
- They add products to your current offer.
- They improve services that they currently offer.
2. Market
Another component of the Ansoff matrix it is the market, it is focused on exploring markets. The situation is generated for different reasons, such as brand internationalization or taking advantage of new niches.
As expected, this form of growth means a greater uncertainty on the investment that is needed and possible growth to be achieved.
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What are the strategies of the Ansoff matrix?
In addition to the axes mentioned above, the product market matrix it is divided between new and existing products and markets, thus forming a picture divided into 4 quadrants.
On the horizontal axis are the products and markets on the vertical axis. Each quadrant represents one of the following strategies:
1. Market penetration
Between the More useful is the market penetration strategy. in it combine current markets with current products.
Is a easy-to-implement strategy, since the business knows both the product and the market. To attract more customers or increase turnover, you need investment.
Some activities you can do a business that applies the market penetration strategy are:
- Create promotions, discounts and offers with the aim of increasing billing.
- Make a greater investment in marketing to improve the acquisition of clients in front of those who are your competitions.
2. Market development
The strategy is located on the axis of current products and current markets. What is needed to apply it? The implementation of actions with which it is achieved access to new markets in a geographical sense.
It is also good to search channels that allow greater distribution or commercialization of products or services that you offer. An excellent way to carry out market development is online sales.
3. Product development
One of the Ansoff strategies is product development. As its name indicates, with it new elements are created to offer in markets in which you already operate. Why is it so useful?
As we mentioned before, the market is constantly changing, so businesses do well to offer new products to meet the current needs of its customers.
4. Diversification
The strategy of Ansoff matrix that causes greater uncertainty is diversification. With it, innovative products or services are launched in new markets.
With it you can enjoy fantastic results. To carry out this strategy, it is recommended combine product development and market development.
How does the Ansoff matrix influence your marketing strategy?
like the , Ansoff’s offers different advantages for those who decide to use it. The main one is that it helps to find an optimal growth strategy for the business.
In addition, it helps to visualize the directions available to move the brand forward. With the information obtained by applying this tool better decisions can be made.
The influence that the strategies based on the Ansoff matrix in a business they are decisive in management, because they help identify growth opportunities that are not identified with the naked eye.
How to make an Ansoff Matrix?
Although the Ansoff matrix is a tool created in the 20th century, it is adapted to the and to the current market. That’s why, it is worth using it in your business.
In addition to knowing what is ansoff matrix, you must know the steps to follow to apply it. That will help you use a tool capable of lasting over time.
Next, we explain how to make a growth matrix:
1. Collect the necessary information
To make it easy for you to implement the Ansoff matrix, you need know in depth both the product and the market. Analyze the ages of your potential customers, their locations and interests.
As for your products, study their prices, sales and segmentation in the current market. Acquire the necessary information and have a deep understanding of it will help you answer the following questions:
- What are those who buy your products or services looking for?
- What can you offer them to meet their needs?
- Which products are most likely to be successful?
Surely in your business they have been in charge of registering this information, but also we suggest you rely on.
2. Increase the sales or ticket of your current products
Now, it is time to determine the four strategies that make up the Ansoff matrix in the area of marketing. As we have already discussed, market penetration is focused on both products and traditional markets.
Keep your attention on what you’re doing do not seek to develop important changes in your products. Focus on increasing sales, attracting more customers and retaining them.
If your business shows stability, apply this strategy, because it is the most financially secure.
3. Focus on research and development
The strategy focuses on the same market, but on new products or services. To do so, investigate what your potential customers need right now and what are your preferences.
Although it requires a higher investment than market penetration, there is very little chance of not being successful, why? You are targeting your customers, so, since they trust you, they will be interested in your new products.
What can you offer in product development? We recommend you make new categories, as “deluxe” or, if you have a food business, in “healthy” versions. It is also valid to create innovative or larger models.
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4. Expand into new niches or geographic areas
Developing markets is not about venturing into areas where your products or services are not valued. The reality is that you decide to enter a new market after determine that they will value your business there.
The new area you focus on may be a new age range, a specific type of customer or even other areas geographical.
5. Take risks and get a higher return
Because it is focused on new products and markets, It is the strategy that requires the most investment and is also the riskiest.. However, if you apply it properly, you could get very high profits.
Diversification can represent an aggressive brand expansion strategy. Some examples of this strategy are:
- Use new resources in marketing.
- Reach other consumers.
Examples of the Ansoff matrix
Something that will help you fully understand how to make an ansoff matrix is to know examples of recognized brands. You can use them as guides to know what you should do in your business.
Next, we talk about the brands that are outstanding examples of today As for the Ansoff matrix application:
1. Ansoff matrix example applied to Coca Cola
Coca cola is a beverage brand that has achieved stand through the years. How has the growth matrix helped you? Strategies are applied in the following ways:
market penetration
The product offered by Coca Cola is widely recognized and very well established in the market. The ways in which he achieves stay top of mind with consumers are:
- Advertising.
- Themed packaging (focused on sports, holidays or movies).
The permanence of Coca Cola is guaranteedbecause it has been positioned for many years.
market development
Coca Cola has always been an international brand, but its original market was the United States. By focusing on market development, it was able to expand to other countries.
To increase the popularity of your brand, took traditional products to new markets or regions.
Product development
The brand has entered the same market with new products, such as the Coca Cola without sugar, light version and Zero. It does not explore new markets, but segments current customers by focusing on those who want to take care of their health.
Diversification
How did you expand your market with new products? Coca Cola focused on people who were looking for other flavors of drinks or preferred orange. In this way, he created Fanta and other similar versions.
2. Example of the product market matrix for Apple
Apple is one of the most recognized electronic device manufacturers globally. Its products have reached every country in the world. For this reason, it is part of our examples on the Ansoff matrix.
The way in which the marketing tool is applied is:
market penetration
Because the brand’s products have always been adapted to people’s needs, the Apple brand is recognized in the market for the quality of its equipment and, obviously, its advertising, which affirms its popularity and ensure its permanence.
Its market penetration strategy is based on strong branding that makes it a love brand with many ambassadors around the world.
market development
Like Coca Cola, Apple’s original market is the United States, but it is currently present on all continents. The brand is committed to constantly making its way into the market, adapting to a new audience.
Thanks to the development of markets, more than 1 billion people they buy their products.
Product development
Smartphones and other Apple devices are characterized by evolve regularly. The brand…
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